Thiele Says Cinema Easement Appropriate Under CPF Law

A rendering of what the rebuilt Sag Harbor Cinema — now the Sag Harbor Cinema Arts Center — would look like. Courtesy of NK Architects and Croxton Collaborative Architects.

It was announced late last month that Southampton Town would consider paying almost $4 million through its Community Preservation Fund to buy easements that would protect the rebuilt cinema façade and its use as a cinema arts center. While not a common use of the CPF, this week New York State Assemblyman Fred W. Thiele Jr. — one of the original authors of the CPF — said not only was it allowed under the law, but that it was not unprecedented.

“You can always argue about how the town’s exercise their discretion — I happen to think, in this case, this is a good purchase through the CPF — but there is no question here that they have the legal authority to do it and that it is consistent with the original intent of the CPF,” Mr. Thiele said in an interview on Friday, October 5.

The CPF is a state law that was adopted in 1999 allowing the five East End towns — East Hampton, Riverhead, Shelter Island, Southampton and Southold — to collect a two-percent transfer tax on real estate sales that the towns could then use to purchase open space, preserve farmland, create recreation and preserve historic buildings and properties.

To date, the fund has collected $1.350 billion and was expanded via a referendum in 2016 to allow the town to tackle water quality initiatives with a portion of the funds.

“If you go back to the first drafts of the law, back to the 1980s, historic preservation has always been a part of the community character of the East End and priority of the CPF,” said Mr. Thiele. “Sometimes towns will purchase an easement, sometimes the property, but this acquisition is clearly authorized by the law and it is not even a close case. The Sag Harbor Cinema is located within a federal designated historic district and is tabled as a contributing building to the historic character of that district. This is historic preservation.”

While the cinema was significantly damaged during a December 2016 fire that claimed its iconic façade and sign, Mr. Thiele said as long as the façade is restored using the same federal guidelines needed to obtain federal tax credits as a historic restoration, then it is legal to use CPF funds for the façade easement. The same would be true of a historic building that was dilapidated by time, said Mr. Thiele, adding that a committee was formed before 2016 to determine how to address the purchase of historic properties or easements where a structure is significantly damaged.

“The National Register guidelines are used by the Sag Harbor HARB which reviewed, commented on and approved this project which is a contributing structure in a National Historic District, the same under the law as an individually designated structure,” said Sag Harbor Partnership board member Susan Mead in an email. “As a local certified government, the village approves construction for a designated historic building on behalf of the State Historic Preservation Office (SHPO).”

The Sag Harbor Partnership is the nonprofit behind the Sag Harbor Cinema Arts Center and Sagcinema LLC, which was created to purchase the Main Street property from owner Gerald Mallow for $8 million early this year.

“And further the Empire State Development grant required the project to be directly reviewed and approved by the SHPO,” Ms. Mead added. “Per our preservation plan with that office, the historic elements remaining in the main theater interior were removed and stored and will be installed in the theater before completion. Again, using the National Register Guidelines.”

The restored façade will include the famous art deco “Sag Harbor” sign — a 2004 reproduction of the original — that was salvaged from the fire and recently restored.

In terms of the use easement — which the town is considering buying to preserve the use of the building as a cinema in perpetuity — Mr. Thiele said it would also be considered applicable under the CPF because it preserves its historic use.

“It is great if you restore the building but the use is relevant also,” he said. If you restore the façade and turn it into a shopping cove I am not sure people would consider that preserving the history of that building.”

The proposed contract between the town and Sagcinema LLC would restrict the use of any buildings on the property to a cinema arts center — only 25 percent of the property can be accessory uses like a café or art gallery. The contract also limits the admission price of movie tickets to 80 percent of “the average film ticket price in the town or county,” according to Mary Wilson, the manager of Southampton Town’s CPF.

A public hearing will be held on the purchase on October 23 at 6 p.m. in Southampton Town Hall.